SANTA ANA — Los Angeles Clippers announcer Mike Smith was acquitted of grand theft Tuesday in a case resulting from his failure to repay a $735,000 loan to a close friend.

An Orange County jury took about two hours to return its verdict. Had Smith been convicted, he would have faced up to five years in prison.

“I’m relieved, obviously, but mostly I’m just grateful to the judge and jury who saw to it (that) the truth came out,” Smith said. “This was a very difficult thing to go through for me and my family.”

Smith failed to repay the loan from his late friend, Bill Steinriede, to help finance a failed real estate deal in Dana Point.

“The debt was never really an issue,” said Smith’s attorney, Dyke Huish. “It was whether he was a thief. And I don’t care what the district attorney says, they were wrong and the jury backed me up.”

What was at issue was whether Smith ever intended to repay the loan when he signed a contract with Steinriede. Deputy District Attorney George McFetridge contended that Smith knew he could not pay back the loan and went through with it anyway.

But the jury accepted Huish’s argument that it was a business deal that no one could have known would go south. Huish said, if anything, the case should have been brought to a civil court, but criminal charges were unwarranted.

Smith said he did not have any criticism of prosecutors who brought the case.

“I’m just thrilled to have this woman by my side,” Smith said as he hugged his wife.

Steinriede died Oct. 5 at age 65. The retired physical education teacher’s videotaped testimony, which was shown to jurors last week, was taken Feb. 5 and March 8 because Steinriede had an inoperable brain tumor.

Smith said he still misses his longtime golfing and surfing buddy.

“I’ve cried many tears for him,” Smith said. “He was my best friend.”

Huish lashed out at the Orange County District Attorney’s Office for prosecuting Smith.

“The District Attorney ought to be more careful,” Huish said. “When a jury comes back with a verdict in less than an hour, more care needs to be given. This was an innocent man since day one.”

Huish applauded the Clippers organization for not firing Smith after he was charged.

“Credit should go to the Clippers organization for not rushing to judgment, for standing by the law and the process,” Huish said. “I wasn’t before, but I am now a Clippers fan because that organization did the right thing.”

McFetridge declined comment on the verdict.

Steinriede and Smith had discussed the Clippers announcer’s involvement in a plan to build multimillion-dollar homes in the Headlands of Dana Point, but Steinriede was not interested, McFetridge said.

But in January 2008, Steinriede gave in when Smith guaranteed to repay the loan in two months, McFetridge said.

Among the promises was Smith’s pledge to sell his house before Steinriede lost his. The prosecutor noted the promise was made while Smith was remodeling his own home.

Steinriede could not afford the monthly $7,200 payment on the second mortgage, but expected to have his money back with nearly 12 percent interest within a couple of months, according to both attorneys.

Huish told jurors during the trial the contract was heavily favored toward Steinriede, allowing him to sue Smith for everything he owned if he failed to repay the loan.

The deal started to crumble along with the economy in the summer of 2008, Huish said. By that September, Steinriede, who was in danger of losing his home, demanded repayment of the loan, Huish said.

The two tried to work out a deal with Smith promising to pay Steinriede $1,000 per month on the loan, Huish said. But Steinriede said that wasn’t enough, he said.

Steinriede never sued Smith. Instead, he went to Orange County prosecutors, claiming he was a victim of theft, pushed into signing contracts not fully explained to him.

Huish said he thinks Steinriede went to prosecutors because he was told that if Smith declared bankruptcy, Steinriede could not collect on the debt.

Charges against Smith’s business partner Bruce Howard Furst were thrown out by a judge in April.

McFetridge said it’s his understanding that Steinriede’s heirs cannot afford to keep the house. Smith has declared bankruptcy, McFetridge said.

Smith was drafted by the Boston Celtics in 1989, the 13th pick overall, but lasted two seasons with the Celtics. He played a few years in Spain before finishing his career with the Clippers in 1994-95. After that season, he became a color commentator for the team.

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